The new vehicle retail sales pace in September is expected to reach the highest level this year, according to a forecast released today by J.D. Power and LMC Automotive. The seasonally adjusted annualized rate (SAAR) retail sales is expected to be 15 million units, flat from a year ago.
While a rash of hurricanes and tropical storms peppered the Southeast and Gulf Coast in recent weeks, retail sales in September are anticipated to reach 1,213,102 units, a 2.6% decrease (selling day adjusted) compared with September 2016.
“Hurricanes Harvey and Irma have disrupted – and will continue to disrupt – new-vehicle retail sales in September and beyond,” says Thomas King, senior vice president of the data and analytics division at J.D. Power. “While, on a national basis, September month-to-date sales are down 0.8 percent from last year, in the South-Central region, which includes Houston, sales are up 14 percent as shoppers replace storm-damaged vehicles and complete purchases that were postponed during the storm.
“In contrast, sales in the Southeast region, which includes Florida, are down 16 percent as the region and its vehicle retailers begin to return to normal operations”
Experts expect the vehicle sales decline in the Southeast will be reversed in the coming weeks, as buyers recover from hurricane damage and start purchasing cars again. That recovery will likely spill over into October.
“The effect of hurricanes Harvey and Irma is expected to boost retail light vehicle demand through the remainder of 2017 and 2018, as recovery continues,” says Jeff Schuster, senior vice president of forecasting at LMC Automotive. “With the need to replace 500,000 or more damaged or destroyed vehicles, the U.S. auto market slowdown will see some relief as demand over the next 6-9 months will likely be upwardly distorted.
“In addition, short-term increase in fleet sales may also be an outcome as current shortages are replenished. However, this does not change the overall expectation of (flat) to weaker demand in the U.S. over the next 2-3 years.”